Sun Pharma slips 5% in 2 days, nears 52-wk low; why drug stock trades weak?

Thus far in August 2025, Sun Pharma has underperformed the market by falling 8 per cent, as compared to a 1 per cent decline in the BSE Sensex

Sun Pharmaceutical Industries share price

Shares of Sun Pharmaceutical Industries (Sun Pharma) are under pressure, down 2 per cent at ₹1,567.85 on the BSE in Thursday's intra-day trade. In comparison, the BSE Sensex was down 0.52 per cent at 80,364 at 10:13 AM.

 

The stock price of the drug company is quoting lower for the second straight trading day, falling 5 per cent during the period. It is trading close to its 52-week low price of ₹1,555, which it touched on March 3, 2025. 

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What's driving the selloff in Sun Pharma?

Thus far in August 2025, Sun Pharma has underperformed the market by falling 8 per cent on reports that the US President sent letters to several global pharmaceutical companies asking them to provide medicines at 'Most Favoured Nation' prices in the US. In comparison, the BSE Sensex was down 1 per cent and the BSE Healthcare index slipped 3.7 per cent during the period.

 

However, Sun Pharma said the company is not among the recipients of the letter cited above. There is no company-specific development, it added. CLICK HERE FOR MORE INFORMATION

 

Sun Pharma in the April to June 2025 quarter (Q1FY26) earnings call said the US business grew by 1.4 per cent to $473 million. This growth is driven by the company's innovative medicines portfolio, with all of the growth products contributing, including Ilumya, Cequa, Winlevi, and Odomzo, but offset by a decline in the company’s generics business due to additional competition in certain products. The US accounted for 29.3 per cent of consolidated sales for the quarter. 

Sun Pharma outlook 

Sun Pharma, in its FY25 annual report, said that the company anticipates mid to high single-digit consolidated topline growth in FY26, and expects its Global Speciality business to continue on its growth path. Research and Development (R&D) spend in FY26 is likely to be in the range of 6 per cent-8 per cent of sales, with increased spending expected on Speciality products.

 

The company's top priorities for FY26 are to enhance compliance across our manufacturing operations and work towards achieving full regulatory resolution at the three facilities facing US FDA action, and prepare the business for potential disruptions arising from tariffs and geopolitical issues.

 

On weakness, Sun Pharma said the increased competitive intensity in the US generics pricing environment, coupled with faster-paced generic drug approvals by the US FDA. 

 

The rising regulatory scrutiny and potential government actions to control drug prices across global markets, and the threat from government actions such as the imposition of tariffs and changes in payment models, including the application of the 'Most Favoured Nations' model, are among the threats for the company, Sun Pharma said in its annual report.   

The management has evaluated the likely impact of prevailing uncertainties relating to the imposition or enhancement of reciprocal tariffs for imports in the US and believes that there are no material impacts on the standalone Ind AS financial statements of the company for the year ended March 31, 2025. 

 

While Sun Pharma saw a 250 basis points year-on-year (Y-o-Y) Rbitda margin improvement in June 2025 quarter, analysts at BNP Paribas India expect margin pressure in the remaining quarters this fiscal, as the company has guided to an incremental spend of $100 million (relating to two speciality product launches. However, the brokerage firm expects Ebitda margin to improve over FY26-28.